Pearson plc homepageinvestor relations
  Pearson Annual Report 1997    

Notes to the Accounts

   
 

2. A) Analysis of sales and operating profit

 

  1997 1996
All figures in millions Sales Operating profit
before exceptional items
Operating profit
after exceptional items
Sales Operating profit
before exceptional items
Operating profit
after exceptional items
Business sectors            
Information 676.3 121.0 107.0 691.6 99.6 88.2
Education 563.6 72.2 60.5 554.3 75.8 60.2
Entertainment 1,053.2 121.3 112.6 803.0 71.0 (41.6)
Investment Banking - 43.1 43.1 - 40.8 40.8







Continuing operations 2,293.1 357.6 323.2 2,048.9 287.2 147.6
Discontinued operations - - - 137.1 34.5 33.7







  2,293.1 357.6 323.2 2,186.0 321.7 181.3







Geographical markets supplied            
United Kingdom 660.5 92.5 76.7 601.4 92.3 82.3
Continental Europe 414.0 82.2 80.7 419.4 73.4 71.5
North America 987.3 152.3 135.9 798.3 96.6 (30.5)
Asia Pacific 183.9 24.0 23.3 185.2 20.6 20.0
Rest of World 47.4 6.6 6.6 44.6 4.3 4.3







Continuing operations 2,293.1 357.6 323.2 2,048.9 287.2 147.6
Discontinued operations - - - 137.1 34.5 33.7







  2,293.1 357.6 323.2 2,186.0 321.7 181.3







Note:
Exceptional items comprise restructuring costs in both 1997 and 1996 (see below) and the 100m charge to profits in 1996 arising from improper accounting at Penguin USA. 

Central costs have now been allocated to profit centres and investment profits credited to the appropriate profit centre. Profits from Cedar Fair, the main source of these investment profits, are included in the Entertainment sector. The final tranche of this investment was sold in 1996 for a profit of 16.3m. Reclassified figures for the years 1993 to 1996 are shown in the five year summary on page 80. Previously these items were included under the heading 'Corporate expenses less other income'. Central costs allocated to discontinued operations amounted to 1.6m in 1996.

Discontinued operations relate to the withdrawal of the Group from the UK regional newspaper business upon its disposal of Westminster Press in December 1996.

Analyses of the profits of partnerships and associated undertakings are shown in note 11.

 

  1997 1996
All figures in million    
Restructuring costs    
Post acquisition:    
All American Communications 4.2 -
Harper Collins Educational - 15.0
Putnam Berkley - 4.4



Other:    
Mindscape 3.7 5.4
Information 14.0 9.2
Addison Wesley Longman 11.7 0.6
Other 0.8 5.8



  34.4 40.4



Note: Information restructuring was mainly in FT branded businesses, 10.0m in 1997 and in 1996, the Financial Times newspaper, 5.8m. Restructuring costs of 0.8m, included within other in 1996, relate to discontinued operations.

 

  1997 1996
All figures in million Total by source Inter- regional Sales Total by source Inter- regional Sales
Geographical markets supplied            
United Kingdom 888.6 (45.7) 842.9 822.7 (51.2) 771.5
Continental Europe 327.1 (7.5) 319.6 330.2 (9.0) 321.2
North America 998.1 (19.8) 978.3 820.8 (20.0) 800.8
Asia Pacific 146.0 (7.2) 138.8 149.0 (4.4) 144.6
Rest of World 13.5 - 13.5 10.9 (0.1) 10.8







Continuing operations 2,373.3 (80.2) 2,293.1 2,133.6 (84.7) 2,048.9

Note: The table above analyses sales by the geographical region from which the products and services originate. Interregional sales are those made between the Group companies in different regions.

 

2. B) Analysis of capital employed

  1997 1996
All figures in million    
Business sectors    
Information 97.5 134.7
Education 379.9 334.5
Entertainment 473.9 429.0
Investment Banking 123.6 113.9



Continuing operations 1,074.9 1,012.1



Geographical location    
United Kingdom 282.4 342.4
Continental Europe 114.3 106.6
North America 635.2 411.4
Asia Pacific 29.9 144.2
Rest of World 13.1 7.5



Continuing operations 1,074.9 1,012.1



Reconciliation of capital employed to net assets    
Capital employed 1,074.9 1,012.1
Less: deferred taxation (37.2) (30.3)
Less: other provisions (174.6) (159.1)
Less: net debt (707.1) (430.4)



Net assets 156.0 392.3



1997 Annual Report
* Group summary
* Information
* Education
* Entertainment
* Investment banking
* Chairman's statement
* Chief Executive's review
* Financial Review
* Financial Policy
* Consolidated profit and loss account
* Consolidated balance sheet
* Consolidated statement of cash flows
* Statement of total recognised gains and losses
* Note of historical cost profits and losses
* Reconciliation of movements in equity shareholders' funds
* Principal subsidiaries and associates
* Five year summary
* Shareholder information
   
* Notes to the accounts
 

* Top of Page